People Overestimate The Value Of Content; Underestimate The Value Of A Service That Makes It Useful

from the time-to-understand-the-difference dept

A silly mini-battle broke out among some bloggers over the weekend concerning some new RSS-feed aggregation site. It's a battle that plays itself out every few months or so, and which we've tried to discuss a few times in the past. What happens is that people get angry because this aggregator (or reader, or browser or whatever) is actually able to build a business around other websites' content. And that gets plenty of folks, including those who I quite frequently agree with, like Mathew Ingram and Tony Hung, to complain that the service has somehow "crossed a line" by building a business "on the backs" of other people's content.

The problem, however, is that this is simply untrue. If it were true, then a ton of online sites would be guilty of the same thing -- including Google. But the reason it's not true is quite simple to understand: if all they were doing was reusing other people's content, then there would be no incentive or reason for people to visit these sites. Why go to these sites when you could just go to the original sites? The reason that people go to these sites, and the reason why these sites can build a business, is because they add value to the content in the form of some sort of service that does more with it. They're not building businesses "on the backs" of others' content, they're building services that people find useful as a way to find, interact with, share or comment on that content.

Unfortunately, though, as we see time and time again, people seem to overvalue the content and undervalue the service. That's why you have newsapers that sue Google, even as it's bringing them more traffic. They overvalue their own content, and undervalue the service that Google is providing: making it easier to find their content. The same is true of just about every other service that kicks off this kind of debate. The service is making it easier to consume, read, share, comment on, organize, find or interact with the content. Otherwise, it wouldn't get any users. The content is important, yes -- and valuable too -- but don't underestimate the value of the service that it performs on that content. So the next time one of these fights breaks out, pay attention to whether people are unfairly blaming a site for "stealing" content, and notice if they're undervaluing the service itself.

Reader Comments

Rev share

It would be nice if there was a way to share revenue between the service consuming the content and the service building it. Even if that amounted to making sure that the feeds passed along advertisements or something. The key is to keep whatever agreement built flexible and reasonable for both sides.

Re: Rev share

First of all, these sites do not CONSUME the content - the consumers (i.e. paying customers sent to the host site) "consume" the content. Consumers, I would add, that otherwise would not have found the host site at all.
In the process, the consumer is subjected to the host site's advertising and/or paywall, so the host still gets to collect it's pound of flesh.
If anything, the host site should be paying the service that is making it easier to find and access the host's goods for sending clients their way.

I don't get it either. Without Google (or some other search engine) news sites would likely get fewer viewers, which means less advertising dollars. But yet, merely because Google makes money diverting those viewers and increasing the news sites' revenues, news sites are pissed off.

In today's world, the MPAA would be suing theater owners for cut of the popcorn/soda profits. Automakers would sue auto repair facilities for profiting off of the fixing their crappy cars. And of course phone companies would be suing the manufacturers and users of fax machines for profiting off of their pipes.

How difficult to understand is the concept that the economy is interconnected? Corporations profits off the business of higher education. The automobile industry profits off the road construction industry. The housing industry profits off the lumber industry. All of which are vise versa.

The automobile industry should not get a cut of the road construction industry, even though the road construction industry depends on cars to drive the construction of roads. Any more than the road construction industry should get a cut from the automobile industry.

If I were Google, I'd give the news industry exactly what they wanted. I'd cut them off and make them pay for the viewers Google sends over.

me so horny

A silly mini-battle broke out among some bloggers over the weekend concerning some new RSS-feed aggregation site. It's a battle that plays itself out every few months or so, and which we've tried to discuss a few times in the past. What happens is that people get angry because this aggregator (or reader, or browser or whatever) is actually able to build a business around other websites' content. And that gets plenty of folks, including those who I quite frequently agree with, like Mathew Ingram and Tony Hung, to complain that the service has somehow "crossed a line" by building a business "on the backs" of other people's content.

The problem, however, is that this is simply untrue. If it were true, then a ton of online sites would be guilty of the same thing -- including Google. But the reason it's not true is quite simple to understand: if all they were doing was reusing other people's content, then there would be no incentive or reason for people to visit these sites. Why go to these sites when you could just go to the original sites? The reason that people go to these sites, and the reason why these sites can build a business, is because they add value to the content in the form of some sort of service that does more with it. They're not building businesses "on the backs" of others' content, they're building services that people find useful as a way to find, interact with, share or comment on that content.

Unfortunately, though, as we see time and time again, people seem to overvalue the content and undervalue the service. That's why you have newsapers that sue Google, even as it's bringing them more traffic. They overvalue their own content, and undervalue the service that Google is providing: making it easier to find their content. The same is true of just about every other service that kicks off this kind of debate. The service is making it easier to consume, read, share, comment on, organize, find or interact with the content. Otherwise, it wouldn't get any users. The content is important, yes -- and valuable too -- but don't underestimate the value of the service that it performs on that content. So the next time one of these fights breaks out, pay attention to whether people are unfairly blaming a site for "stealing" content, and notice if they're undervaluing the service itself.

to argue the other side for a moment

If my business model requires that people visit my site in my way, then someone else borrowing content - even pointing to my content - could impact me negatively.

Consider the ancient TicketMaster v CitySearch lawsuit where Ticketmaster was essentially arguing: we want people to visit us via our front door as we give them many opportunities to spend money with us (concert T-shirts, alternative shows, etc). If you link directly to a given page, granted you are driving traffic to us, but we want to control the experience of our visitors from frontdoor on in as our revenue model depends on it.

One might argue that this means their revenue model is faulty. But I am not so sure it is that simple. It seems to me they should be able to exert some control over how customers experience their site. If the customers don't like the guided tour, the customers won't be back - but it would be (in my example) TM's call to make.

Re: to argue the other side for a moment

One might argue that this means their revenue model is faulty. But I am not so sure it is that simple.

It is that simple. The internet isn't built to support that model, so it is faulty revenue model.

they should be able to exert some control over how customers experience their site

It's called web design. Give the customer a reason to go directly to your site instead of deep linking. If a site operator wants to dictate the customer experience, they can program the site in flash or some other proprietary method, or force the customer to register. Of course, both methods tend to discourage customers, so it's not exactly a good solution. HTML and the other standardized languages are interpreted on the customer's computer, so they retain the final say in how they experience the web.

but it would be (in my example) TM's call to make

TicketMaster can exercise complete control over how their site is developed, and can attempt to influence the customer experience through design. If they don't want to be deep-linked, they are free to try and stop it, but all it winds up doing is wasting time and money.

Re: to argue the other side for a moment

If my business model requires that people visit my site in my way, then someone else borrowing content - even pointing to my content - could impact me negatively.

Two points on that. First, I find it unlikely that having more people pointed to your content could impact you negatively.

But, second, and much more importantly, if that's your business model, it's not sustainable. It's like trying to sell buggy whips to automobile owners.

One might argue that this means their revenue model is faulty. But I am not so sure it is that simple. It seems to me they should be able to exert some control over how customers experience their site.

If that's the case, then set up the site with such controls in place. Don't offer up your content via RSS or something that gives de facto permission to aggregate that content.

But, what you'll quickly find is that if you don't make your content easy to interact with, people will go elsewhere.

It is not about right or wrong

The question is not of right or wrong, but whether the system that contains this sort of interdependence is sustainable in the long run. If Google siphons off too much of the newspaper's revenue to the point that newspaper shuts down or has to drastically change its business model, then Google also gets hurt, and eventually the whole system stops functioning.

just another

way for larger corporations to exploit th earning potential of a worker. The original post is absurd that the content maker puts too much a value on their content. It is their content, they can assign any value they want. If that value is too high, then no one will access it.

You don't see Google giving away its searching code. Because they value their content, it makes them money. So to, should bloggers make money if their content is being used.

The service does not make the money, b/c the service would not exist without the content.

Content needs context

You're spot on. As we work on an aggreation of law blog content at LexBlog, it's not the aggregation of stuff that makes it worthwhile. It's how we make this content more valuable and relevant to the legal community, to the media (bloggers and msm), and to the public. Content needs context.

It's Econ 101

You write a fancy article on a new widget. You freely put the content out there, setup the RSS feed of your content and darn-near beg the world to consume it. You either place no direct value on your efforts. Since you failed to recognize the value of the content and someone else capitalizes on your oversight then you are the one to blame in the first place.

People tend to be inherently lazy. That's why they "work for the man" because they don't reconize the value or potential of their efforts.

Comment.. and Discussion

I totally agree with you in regards to how content tends to be distributed and re-published on other sites. I don't think anyone could argue that that isn't a good thing. However, if you consider a theoretical service that takes your content (and others), wraps its own ads around it, adds its own comment system and user registration database.

Suddenly, people no longer visit the site. They get the feed, they can share with their friends, and the site gets money from the ads.

Obviously, nobody is doing that or even close today that I know of. But it is technically feasable, and what would the reaction be? Closed communities, partial-entry feeds and increased inline feed ads.

Re: Re: Comment.. and Discussion

Yeah, I think I get what you are saying. The content is not destination, it is the vehicle. When people read the blog, find value in it, then they will seek out the creator(s) for consulting, services, advice.

The idea has a very Free Software Foundation feel to it.. I remember when I was in a discussion with a friend of mine about the FSF, I remember saying they had a very utopian ideal. He replied, RMS has no problem taking money. He just knows that, by giving the good stuff away, people will gladly pay for consulting.

You don't get it

It's not about how useful the service is. And it's not about the reach of the content. It's about how that content gets used. I would have been perfectly happy (and so would have a lot of people) if all that Shyftr did was to excerpt my posts. Instead, they lifted the entire content of my posts from my site feed and used it on their site. That's outrageous. For those of us who reserve full copyright on our content, it's also a copyright infringement.

Furthermore, there is no opt-in or opt-out mechanism. Feed publishers should be given the choice to opt into a service like this, and to opt out if they change their mind. One doesn't go around gathering full feed content from people, infringe on their copyright without a care in the world, and expect to reap no consequences.

Re: You don't get it

I would have been perfectly happy (and so would have a lot of people) if all that Shyftr did was to excerpt my posts. Instead, they lifted the entire content of my posts from my site feed and used it on their site.

Huh? Not at all. YOU put up full content feeds and said "here's how to use my content." What did you expect an aggregator to do? They did exactly what you allowed with your feed.

It's the same thing Google Reader does and Bloglines does. Why did you get upset at Shyftr?

For those of us who reserve full copyright on our content, it's also a copyright infringement.

Then so is Google Reader and Bloglines. And every other site. Sorry, I don't buy it. You put the feed out there, why are you so upset that people are using it?

One doesn't go around gathering full feed content from people, infringe on their copyright without a care in the world, and expect to reap no consequences.

Then why don't you change your feed and lock up your content. I'm sorry, but here's a site that's trying to HELP people by making your content MORE valuable, and you're attacking them. I don't get it.

You just don't get it. I expected better from Techdirt.

Expected better how? This post is entirely consistent with everything I've written for a decade. You should be disappointed if I changed my story, rather than stayed consistent.

You think that it's okay for people to bitch about the RIAA tactics and then ignore it when some bloggers basically act the same way?

Doesn't this sound familiar?

If bloggers can't adapt to what thier customers want, then they should die out, just like hard CDs and record stores. If they want to stay alive, they'll have to innovate to meet the needs of thier fan base, NOT the other way around.

What's next, will bloggers want a tax from everyone who uses a service site to support them?

Free Stuff

@Rose: I want free gasoline, free food, and free ice cream. Lots of people would love free everything. I guess the grocery stores, gas companies and creameries should go out of business because they can't give us the free stuff we want.

Re: Free Stuff

I want free gasoline, free food, and free ice cream. Lots of people would love free everything. I guess the grocery stores, gas companies and creameries should go out of business because they can't give us the free stuff we want.

You are missing the point. We're talking about infinite goods, where the infinite supply means that they *can* be offered for free, and someone WILL offer them for free eventually, undercutting any other business model. That's just basic supply and demand.

No one is demanding that anyone give out anything for free. They're just pointing out that with infinite supply, basic economics says the price will get pushed to zero.

What you're talking about are scarce goods, where supply is not infinite, and the market will set a higher price.

Re: Free Stuff

Once again, that's value versus worth. I am willing to work my butt off for money, so that I can buy food to eat. I value food that much. It is worth that to me, the consumer.

Most blog feeds are not very vaulable to me, the consumer so I am not willing to work my butt of just to get to the site. If I don't, I won't see the ads and the product will disappear. No big deal, because the value of the product being offered does not exceed the worth of my effort to get the product.

I'm not saying that everything should be free. I'm saying that if the product isn't good enough, we won't work hard to get it. So you should either make the product easier to get, or make it more valuable. Don't whine and try and make me buy your product your way no matter what, even if I decide I don't want it. That's the kind of shit I expect from the music industry, not from bloggers.

Amusement

I'm always amused by the battle between content providers and indexing services. The content providers want more traffic, but always complain about the sites that send it to them. Silly rabbit, the internet is for everybody.

Oops...

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